Gordon Campbell on APEC, and its significance for the TPP talks

September 10th, 2012

Once upon a time, the APEC gathering of nations threatened to become a significant free trade bloc in its own right. Remember the Bogor Goals of 1994? But these days, not so much, apart from a bit of fiddling around with eco-friendly tariff levels. APEC has since declined in importance as this insightful piece in the Toronto Globe and Mail noted to where it is widely perceived as little more than a “talking shop” where (off the main agenda) the two competing trade pacts jostling for leadership in the Asia Pacific region are being promoted. Those two competing pacts are the China-led tripartite grouping on the one hand, that includes South Korea and which is ardently wooing Japan. The other is the US-led Trans Pacific Partnership club of actual and prospective members (Mexico, Australia, New Zealand, Canada, Chile, Peru, Brunei, Singapore, Malaysia and Vietnam) which is also actively wooing Japan. The TPP bloc didn’t do much more than exchange pleasantries in Vladivostok but it will be meeting for more significant purposes in a few days time in Leesburg. Virginia.

Japan is, in other words, the key player that both camps are trying to draft. China and Japan however are currently locked in bitter territorial disputes over islands that both countries claim, and which Japan is seeking to nationalise. Largely to whip up nationalistic fervour inside Japan to the benefit of an unpopular government, before some upcoming elections. Yet according to the Canadian analysis, Japan is more inclined these days to join the China–led trade grouping:

Which way Japan, the world’s third-largest economy after the U.S. and China, tilts is seen as crucial to the success of the TPP. Tokyo clearly views this as an either-or decision, and has given strong indications that it sees the tripartite regional deal as more advantageous (and less difficult to join) than the TPP, which would require opening its own highly protected agricultural markets.

Meanwhile, the influential Japanese Yomiuri Shimbun newspaper– in this September 8 editorial urged the Japanese government to break its deadlock on the TPP and pursue a two track policy. This would involve Japan engaging with the TPP (which Japan declined at APEC to confirm it would do) and also pursuing the tripartite talks with China and a bilateral trade deal with South Korea, without giving away any ground ( literally) on the territorial disputes that are raging over the Senkaku and Takeshima islands, in the process.

The Yomiuri Shimbun reading of the likely timetable for the TPP process from here is interesting. While Prime Minister John Key has been reported as being hopeful of a TPP deal by year’s end, – this merely echoes the desired US timeframe – the Japanese are plainly not expecting negotiations to even get into “full swing” until next year. Here’s Yomiuri Shimbun’s take:

Initially, [Japanese Prime Minister Yoshihiko] Noda wanted to express Japan’s intention to participate in the talks at the upcoming meeting in Russia. However, as some within the Democratic Party of Japan and agricultural organizations oppose Japan participating in the TPP talks, there has been little progress in reaching a consensus within the government and the ruling DPJ. Wary that his power base might be shaken if he announced Japan’s participation in the TPP talks, Noda has apparently had second thoughts about doing so.

Considering the required period for giving notice to the U.S. Congress, it is reckoned that Japan must express its intention to participate in the talks no later than this month if it is to start negotiating with the nine other countries this year. Thus, there is no longer any hope that Japan can take part in the talks in 2012. This is a worrisome development. Meanwhile, it has become certain that Canada and Mexico will join the negotiations, bringing the participating countries to 11 and leaving slow-going Japan further behind.

U.S. President Barack Obama hopes to see the TPP negotiations concluded by the end of the year. Although that appears unlikely, the 11 participating countries are expected to hold talks in September and December, bringing the negotiations into full swing over the next year.

Will the US be willing to proceed without Japan – and thus push it into the arms of China? That seems unlikely. For all of Noda’s self-interested foot dragging, Japan is a prize catch for the TPP and for Washington, and it may yet come to set the TPP timetable. Access to those “ highly protected agricultural markets” in Japan and elsewhere are of course, the prime outcome that New Zealand wants in return for participating in the TPP negotiations and their related horse trading. It is what we also want from the bilateral trade deal with Russia that John Key discussed with Russian leader Vladimir Putin during their much ballyhooed half hour meeting at APEC.

Reportedly Putin indicated that his partners in Belarus and Kazakhstan would have objections to any free access by New Zealand to their agricultural markets. (And don’t even get started on what the US farming lobby would have to say if the TPP ever did propose that New Zealand should get freer entry for our agriculture to their farm markets.) In sum, we still seem likely to be playing a losing hand when it comes down to seeking significant gains on agricultural from any of these free trade initiatives.

More to the point, we seem to be playing a losing hand with the TPP in general. This US-led trade gathering – again as the Canadian press at least, has noted – now looks as much like a NATO –type alliance of the ‘like-minded” than a normal trading bloc. From its inception, the TPP has been promoted by the Americans as a counterweight to China’s ambitions in the Asia Pacific region. Significantly, the TPP excludes China. That’s because it has a diplomatic and security rationale, as much as any purposes generated by trade. By signing onto the TPP process – thanks Phil Goff, ditto John Key – New Zealand has effectively aligned itself in diplomatic, security and trade opposition to the most powerful economies in Asia : namely China, South Korea, and in all likelihood, Japan. Is this really in our own best interests? Especially when even our friends aren’t likely to give us the agricultural access we crave?

Arguably then, if we do see our future trade interests as being part of Asia, we should detach ourselves from the TPP as discreetly as we can. Because, to repeat:

(a) The TPP is little more than a Washington–led security alliance in the guise of a trade pact, and is being directed tactically against a China that we should be seeking to befriend;
(b) US farmers will ensure that the TPP cannot deliver us the freer agricultural access that would be the only worthwhile quid pro quo for the level of concessions the TPP will require of us. And of course;
(c) The TPP negotiations and the level of concessions they entail pose a genuine threat to our national autonomy, and;
(d) The negotiations are being conducted amidst a total secrecy blackout that makes a mockery of Parliament and the democratic process.

BTW, the informed critical analysis of APEC and its bearing on the TPP process provided by the Canadian media was noticeably absent from the New Zealand coverage. By and large, the reports from our travelling media in Vladivostok were indistinguishable from a DPMC press handout. Where we significant players at Vladivostok? Hardly. Still, at least John Key did make this story in the Chicago Tribune.

ENDS

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